The balance of power in the job market is shifting slowly toward employees from employers.
Bob Funk sees it firsthand from his position as chief executive officer of staffing agency Express Employment Professionals.
“We’re short of people in a number of cities,” he said.
So he’s changing the focus of his $2.5 billion business. Instead of concentrating on finding jobs for those who want them, Express Employment is putting more effort into finding workers for companies that need them.
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“We’re back in the recruiting market again,” Funk said.
The 74-year-old industry veteran isn’t the only one to notice the change. Americans who have been hunting for employment for more than six months are finding they’re having better luck landing a job, while people who had given up looking are returning to the labor force to resume their search.
Companies, meanwhile, are beefing up their in-house recruiting teams and increasingly using complicated computer algorithms to scour the Web for prospective job candidates.
This is all good news for the economy, according to Nariman Behravesh, chief economist for IHS. He said the U.S. has entered a “virtuous cycle” where job gains are leading to increased household expenditures, encouraging employers to hire more workers. Consumer spending rose in June by the most in three months, according to Commerce Department data published Aug. 1.
The expansion “is self-reinforcing and is very solid,” Behravesh said. “Growth of around 3 percent, plus or minus, is well within the cards for the remainder of this year and much of next year.”
So far, compensation increases are the missing ingredient in what has otherwise been a strengthening jobs recovery. Average hourly earnings, in contrast, increased just 2 percent in July from a year earlier, barely keeping up with the rise in inflation.
Employers in general have been “pretty stubborn” about increasing wages, said Jeffrey Joerres, executive chairman of staffing company ManpowerGroup. That may be about to change as the pool of available candidates shrinks.
“You can see a little anxiety among employers,” he said. “I can feel the inflection point is coming.”
Michael Durney, chief executive officer of Dice Holdings, agrees.
“I think you’re going to start to see wage inflation,” said Durney, whose company provides specialized websites that match employers with potential employees in industries such as technology and financial services.
In a sign of the changing dynamics, some 450 businesses have signed up for Dice’s Open Web product since it was introduced in December. The computer algorithm allows them to search 130 public sites for people with specific skills, such as Java software development. The sites include Stack Overflow, a question-and-answer forum for programmers, and Twitter’s online social-networking service.
Critics charge that such search processes can be too discriminating, weeding out viable job candidates because they don’t exactly meet the required criteria.
Like some of its customers, Dice feels the pinch from the tighter market: It added two recruiters in the last two months to help it fill 60 open positions, Durney said.
ManpowerGroup also is taking on recruiters and increasing “recruiting dollars” to find the workers its customers need, Joerres said. It is encouraging its staff members to go beyond social media and get out of the office to meet prospective job candidates at forums, trade-association meetings and other public gatherings.
Companies recognize it’s getting harder to find employees, so they’re making their hiring decisions more quickly, Joerres added. Employers now take about three months on average to hire a worker from the time they put in a request with Manpower. That’s down 30 percent from about 18 months ago.
Businesses also are more inclined to hold onto staff. Conversions — giving full-time jobs to the temporary employees Manpower provides — are at a three-year high, according to Joerres.
The increase in openings is encouraging Americans who had stopped searching to resume their pursuit. The workforce has grown by 1.09 million workers so far this year, according to figures from the Labor Department.